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Tool | November 2017

State-by-State Guide to Taxes on Retirees

Florida

The Bottom Line

Most Tax-Friendly

One of Kiplinger's top ten most tax-friendly states for retirees, the Sunshine State is very popular with retirees, not just because of its year-round sunshine but also because of the absence of a state income tax. Permanent residents are entitled to a homestead exemption of up to $50,000, regardless of age, and seniors may qualify for an additional exemption.

State Sales Tax

6% state levy. Localities can add as much as 2%, and the average combined rate is 6.8%, according to the Tax Foundation.

Income Tax Range

There is no state income tax.

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

Retirement income is not taxed.

IRAs

Retirement income is not taxed.

401(k)s and Other Defined-Contribution Employer Retirement Plans

Retirement income is not taxed.

Private Pensions

Retirement income is not taxed.

Public Pensions

Retirement income is not taxed.

Property Taxes

The median property tax on Florida's median home value of $159,000 is $1,686.

Tax breaks for seniors: Florida residents ages 65 and older who meet certain income limits can receive an extra homestead exemption of up to $50,000 from some city and county governments and/or an exemption equal to the assessed value of the property, as long as the real estate has a fair market value of less than $250,000, the homeowner has maintained permanent residence at the location for at least 25 years, and household income does not exceed $28,841 in 2017. Any widow or widower who is a Florida resident may claim an additional $500 exemption.

Vehicle Taxes

6 percent state sales tax is due on the entire purchase price. Additionally, county sales tax (based on where the buyer lives) is due on the first $5,000 of the purchase price (or on each lease payment).